The Influence of Determinants on Corporate Dividend Policy: An Empirical Study of Food, Beverage, and Tobacco Companies Listed on The Colombo Stock Exchange in Sri Lanka

The formulation of corporate dividend policy is a critical decision in corporate finance, yet the determinants influencing these policies remain inconclusive, particularly within specific industries. This study aims to examine the key factors that influence the dividend policies of companies within the food, beverage, and tobacco sectors listed on the Colombo Stock Exchange (CSE) in Sri Lanka. By including tobacco companies alongside food and beverage firms, the research captures a broader spectrum of the industry, recognizing the interconnected nature of these sectors in the Sri Lankan market. Adopting a quantitative approach, the study analyzes data from 15 selected companies over a ten-year period (2011-2020), using secondary data sources. The impact of profitability, leverage, firm risk, and firm size on dividend policy was assessed through multiple regression analysis. The findings reveal that both profitability and leverage have a significant positive relationship with dividend per share, while firm size exhibits a significant negative relationship. Conversely, firm risk shows a negative but statistically insignificant relationship with dividend per share. These results provide valuable insights for financial managers in developing dividend policies and assist investors in making informed investment decisions. The inclusion of tobacco companies ensures that the findings are relevant to the entire spectrum of the food and beverage industry, reflecting the unique dynamics of these sectors in Sri Lanka.